Grant Thornton: Facilitating EAM

In this business profile, Bill Slama and Ken Deakyne of Grant Thornton LLP Business Consulting and Technology and Technology Solutions Services discuss the importance of enterprise asset management. Grant Thornton LLP is a sponsor of the HFMA Large System Controllers Council.

What is enterprise asset management? Why is it important to the healthcare industry?

Enterprise Asset Management (EAM) is a program that manages the life cycle of physical assets using a systematic process for cost-effectively planning, acquiring, deploying, operating, maintaining, and dispositioning. It involves assessing an organization’s departments, facilities, and business units to standardize management functions and apply global management strategies across the enterprise.a

With the consolidation of hospitals into larger health systems, organizations are finding their asset management programs don’t align—the policies, processes, and supporting technologies are all different. Disparate programs don’t allow health systems to take advantage of enterprise efficiencies, purchasing power, or best practices. However, by standardizing operations and consolidating data, organizations can optimize their asset management programs. This helps contribute to improved patient care, cost containment, and the identification of operational efficiencies.

A foundational principle when designing an EAM program is standardization. If hospitals follow the same processes and use the same technologies across the enterprise, there is a high degree of predictability, which allows for efficient and cost-effective management of assets. Standardization also lets organizations leverage analytics to provide key insights into asset management, identify improvement opportunities, and enable better decision making. It allows hospitals to define the proper way to execute clinical, financial, and administrative tasks, as well as provide training, and maintain compliance.

What are key indicators of ineffective asset management?

There are several metrics that can reveal a problem or improvement opportunity:

Poor utilization of assets: Is the organization getting the most out of its assets?

Increased annual spend: If an organization has $3 billion in assets and every year it continues to spend $100 million more, this is a red flag. Organizations should know why they are spending the additional money and have justification for the expense.

Excessive overtime: This may indicate staffing inconsistencies or inefficiencies.

Inability to locate assets: This may indicate sub-par tracking mechanisms.

High total cost of ownership: Does the asset have poor reliability? Is the organization over-maintaining the asset when it should be replaced?

Inability to gain useful insights from data: This often happens when there is no single source of truth for asset data. In these cases, disparate data systems lead to uninformed business decisions.

What are the common missteps and areas of opportunity in EAM?

Organizations often fail to understand that an asset has a life cycle, and this life cycle begins with the planning stage, before making any acquisitions. For a major capital spend, this entails analyzing what the best asset is for the entity and why. Unfortunately, too many health systems believe the asset life cycle starts with maintenance. Although this is a key part, it is not the initial step. Figure 1 illustrates the phases that comprise the asset management life cycle.

Additionally, organizations tend to overlook the importance of redeploying assets across the enterprise to avoid new spend altogether. It’s important for organizations to understand that just because an asset no longer adds value at “Hospital A” doesn’t mean it can’t be repurposed and redeployed at “Hospital B.” For example, smaller facilities that may not have the budget to purchase new high-dollar items, such as MRIs, specialty beds, or surgical robots, can often be the beneficiaries of “slightly used” equipment that is still functioning at full capacity, and will provide that hospital with the capabilities to provide care they otherwise would have been unable to deliver.

Organizations also tend to overlook key stakeholders in the asset life cycle. There are many resources involved in planning for, procuring, installing, using, and maintaining an asset. Depending on the item, these can include the human resources department (that ensures employees with proper skill sets are hired); doctors and nurses who use the equipment; clinical engineers who install and service items; and information technology staff who ensure devices are integrated appropriately. To be effective, health systems must understand who has a stake in EAM, involve them in the process, and meet their expectations.

Managing the Asset Life Cycle Reduces Total Cost of Ownership

Another common misstep relates to the mismanagement of networked assets that contain protected health information. Assets that are used to treat patients are operated by clinicians and maintained by clinical engineering; critical patches, updates or upgrades to hardware or firmware on those assets should be maintained by Information Services. As self-reporting devices (e.g., devices with the ability to communicate make/model/location data back to the organization through the IoT) begin to emerge, these types of issues can be remedied. However, due to cost and infrastructure constraints, the number of self-reporting devices in present-day facilities makes up only a fraction of the total asset inventory. As a result, oftentimes these networked devices slip through the cracks because an established update procedure does not exist. If they’re not maintained properly, these devices can represent a significant cybersecurity risk to the organization.

Organizations also sometimes fail to look at performance history before replacing an asset. Without engaging in this type of review, the entity might not be purchasing the optimal item. For example, you wouldn’t continue to buy a certain car model if you’ve had repeated problems with that model previously. Similarly, an organization shouldn’t purchase the same MRI if it has experienced significant maintenance issues with that model in the past.

When an asset management program is not appropriately managed, it also can lead to departmental “hoarding.” This stems from a fear the asset will not be available to treat a patient when it’s needed and usually occurs after repeated negative experiences. Unfortunately, when staff hoard equipment and remove it from the management life cycle, the equipment may not receive the proper maintenance or be optimally utilized, which could result in both financial and patient safety problems.

How does Grant Thornton help organizations realize better EAM?

We begin by identifying the stakeholders and understanding who should be involved in improving the asset management life cycle. These individuals or departments are the in-house experts who deal with asset management issues on a day-to-day basis and are in the best position to realize and adopt change. Once we identify these, we assess where the organization is within our asset maturity model (see exhibit below). We perform a detailed risk assessment, looking at financial, operational, and patient safety gaps. We then develop strategies to address risks and close identified gaps. This includes working with stakeholders to gather business requirements, defining strategy, and putting a roadmap together that engages the organization in long-term performance improvement.

Streamline Work Processes

What does a successful EAM program look like?

Ultimately, organizations should aim to have the “right asset at the right place at the right time.” This will ensure stakeholders can fully utilize their assets and prevent waste in the ordering and maintenance processes. Health systems also should have established methodologies for mitigating risks and engaging in performance improvement.

There are countless assets in a hospital, including everything from clinical equipment to supplies to real estate. When an organization has the right people, processes, and data in place, it can realize high-functioning asset management, which not only serves the entity financially but supports the delivery of safe and reliable patient care.

About Grant Thornton

Our clients take advantage of our collective knowledge, gained from long experience in and with healthcare organizations. Grant Thornton LLP Health Care professionals across the country personally deliver solutions and operational improvements to meet patient care, compliance, and business needs.

Footnotes

Content for this Business Profile is supplied by Grant Thornton LLP. This published piece is provided for advertisement purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions of those profiled are those of the individual and not those of HFMA. References to commercial manufacturers, vendors, products, or services that appear do not constitute endorsement by HFMA.

In this business profile, Bill Slama and Ken Deakyne of Grant Thornton LLP Business Consulting and Technology and Technology Solutions Services discuss the importance of enterprise asset management. Grant Thornton LLP is a sponsor of the HFMA Large System Controllers Council.

What is enterprise asset management? Why is it important to the healthcare industry?

Enterprise Asset Management (EAM) is a program that manages the life cycle of physical assets using a systematic process for cost-effectively planning, acquiring, deploying, operating, maintaining, and dispositioning. It involves assessing an organization’s departments, facilities, and business units to standardize management functions and apply global management strategies across the enterprise.a

With the consolidation of hospitals into larger health systems, organizations are finding their asset management programs don’t align—the policies, processes, and supporting technologies are all different. Disparate programs don’t allow health systems to take advantage of enterprise efficiencies, purchasing power, or best practices. However, by standardizing operations and consolidating data, organizations can optimize their asset management programs. This helps contribute to improved patient care, cost containment, and the identification of operational efficiencies.

A foundational principle when designing an EAM program is standardization. If hospitals follow the same processes and use the same technologies across the enterprise, there is a high degree of predictability, which allows for efficient and cost-effective management of assets. Standardization also lets organizations leverage analytics to provide key insights into asset management, identify improvement opportunities, and enable better decision making. It allows hospitals to define the proper way to execute clinical, financial, and administrative tasks, as well as provide training, and maintain compliance.

What are key indicators of ineffective asset management?

There are several metrics that can reveal a problem or improvement opportunity:

Poor utilization of assets: Is the organization getting the most out of its assets?

Increased annual spend: If an organization has $3 billion in assets and every year it continues to spend $100 million more, this is a red flag. Organizations should know why they are spending the additional money and have justification for the expense.

Excessive overtime: This may indicate staffing inconsistencies or inefficiencies.

Inability to locate assets: This may indicate sub-par tracking mechanisms.

High total cost of ownership: Does the asset have poor reliability? Is the organization over-maintaining the asset when it should be replaced?

Inability to gain useful insights from data: This often happens when there is no single source of truth for asset data. In these cases, disparate data systems lead to uninformed business decisions.

What are the common missteps and areas of opportunity in EAM?

Organizations often fail to understand that an asset has a life cycle, and this life cycle begins with the planning stage, before making any acquisitions. For a major capital spend, this entails analyzing what the best asset is for the entity and why. Unfortunately, too many health systems believe the asset life cycle starts with maintenance. Although this is a key part, it is not the initial step. Figure 1 illustrates the phases that comprise the asset management life cycle.

Additionally, organizations tend to overlook the importance of redeploying assets across the enterprise to avoid new spend altogether. It’s important for organizations to understand that just because an asset no longer adds value at “Hospital A” doesn’t mean it can’t be repurposed and redeployed at “Hospital B.” For example, smaller facilities that may not have the budget to purchase new high-dollar items, such as MRIs, specialty beds, or surgical robots, can often be the beneficiaries of “slightly used” equipment that is still functioning at full capacity, and will provide that hospital with the capabilities to provide care they otherwise would have been unable to deliver.

Organizations also tend to overlook key stakeholders in the asset life cycle. There are many resources involved in planning for, procuring, installing, using, and maintaining an asset. Depending on the item, these can include the human resources department (that ensures employees with proper skill sets are hired); doctors and nurses who use the equipment; clinical engineers who install and service items; and information technology staff who ensure devices are integrated appropriately. To be effective, health systems must understand who has a stake in EAM, involve them in the process, and meet their expectations.

Managing the Asset Life Cycle Reduces Total Cost of Ownership

Another common misstep relates to the mismanagement of networked assets that contain protected health information. Assets that are used to treat patients are operated by clinicians and maintained by clinical engineering; critical patches, updates or upgrades to hardware or firmware on those assets should be maintained by Information Services. As self-reporting devices (e.g., devices with the ability to communicate make/model/location data back to the organization through the IoT) begin to emerge, these types of issues can be remedied. However, due to cost and infrastructure constraints, the number of self-reporting devices in present-day facilities makes up only a fraction of the total asset inventory. As a result, oftentimes these networked devices slip through the cracks because an established update procedure does not exist. If they’re not maintained properly, these devices can represent a significant cybersecurity risk to the organization.

Organizations also sometimes fail to look at performance history before replacing an asset. Without engaging in this type of review, the entity might not be purchasing the optimal item. For example, you wouldn’t continue to buy a certain car model if you’ve had repeated problems with that model previously. Similarly, an organization shouldn’t purchase the same MRI if it has experienced significant maintenance issues with that model in the past.

When an asset management program is not appropriately managed, it also can lead to departmental “hoarding.” This stems from a fear the asset will not be available to treat a patient when it’s needed and usually occurs after repeated negative experiences. Unfortunately, when staff hoard equipment and remove it from the management life cycle, the equipment may not receive the proper maintenance or be optimally utilized, which could result in both financial and patient safety problems.

How does Grant Thornton help organizations realize better EAM?

We begin by identifying the stakeholders and understanding who should be involved in improving the asset management life cycle. These individuals or departments are the in-house experts who deal with asset management issues on a day-to-day basis and are in the best position to realize and adopt change. Once we identify these, we assess where the organization is within our asset maturity model (see exhibit below). We perform a detailed risk assessment, looking at financial, operational, and patient safety gaps. We then develop strategies to address risks and close identified gaps. This includes working with stakeholders to gather business requirements, defining strategy, and putting a roadmap together that engages the organization in long-term performance improvement.

Streamline Work Processes

What does a successful EAM program look like?

Ultimately, organizations should aim to have the “right asset at the right place at the right time.” This will ensure stakeholders can fully utilize their assets and prevent waste in the ordering and maintenance processes. Health systems also should have established methodologies for mitigating risks and engaging in performance improvement.

There are countless assets in a hospital, including everything from clinical equipment to supplies to real estate. When an organization has the right people, processes, and data in place, it can realize high-functioning asset management, which not only serves the entity financially but supports the delivery of safe and reliable patient care.

About Grant Thornton

Our clients take advantage of our collective knowledge, gained from long experience in and with healthcare organizations. Grant Thornton LLP Health Care professionals across the country personally deliver solutions and operational improvements to meet patient care, compliance, and business needs.

Footnotes

Content for this Business Profile is supplied by Grant Thornton LLP. This published piece is provided for advertisement purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions of those profiled are those of the individual and not those of HFMA. References to commercial manufacturers, vendors, products, or services that appear do not constitute endorsement by HFMA.

HFMA RESOURCE LIBRARY

Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.

No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.

This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.

This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.

Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.

Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.

To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.

Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.

Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.

Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.

Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.

The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.

Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.

Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.

Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.

Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.

The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.

The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.

Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.

Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.

Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.

Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.

HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.

The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.

Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.

Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?

Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.

This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.

Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.

With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.

Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.